by Toby Smith 06/30/08
Q: I'm new to options trading, and I don't understand how an option is valued.
A: There are five elements that affect the value of an option: cost of the underlying stock, the option's strike price, time left in the options expiration cycle, volatility and whether it is a call versus a put.
Other elements, such as dividend payouts and interest rates, matter as well, but they usually affect price on an intuitive basis.
Michael Shulman
The Obama Bounce Trade: Here Today, Gone Tomorrow
When the election euphoria ends, the markets and investors have to face reality about the economy.
7 Trades You Can Make After Election Day
The election is over! How to play and trade Obama's first year in office.
Don't Let Optimistic Analysts Lead You Off a Cliff
Long-only money managers are urging investors to play the coming bottom. Before you become a lemming, check out this S&P math.
The Best Short in This Market: Restaurants
Restaurant spending continues to decline, so it's time to put your money where your mouth isn't. There are four companies that you should consider shorting now.
An Incredible Opportunity to Short the Banks
The 'Rescue Bounce' gives traders another chance to profit from this debacle in the financials.
